Lessons about Business in Asia – it is not different

As I mentioned in my last post, in the last three weeks, I have been visiting Singapore and India as part of a International Business in Asia course (part of my AGSM MBA). While I have accumulated many ideas for new posts in the last few weeks, I think there is no better was to restart my posting than with a post that summarizes my main learnings from the trip.

Everybody talks about how different Asia is. About how business in India, China, Singapore or any other country in Asia is totally different then the western way of doing business. This is the frame of mind that I came with to a n educational trip in Asia (Singapore and Mumbai). However, I discovered  that there are no differences! Business is business. Everywhere.

“This guy is crazy”, you must think to yourselves. “Everybody knows that there are cultural differences and that companies have failed because they did not understand these differences”. And my answer is… You are completely right. Well, expect about the crazy part…

I am not saying that the countries are not different or that you do need to respect diversity before you venture into a new market. I am just saying, that this is what you would do when you will go to every country in the world. East or West. Let me go over some of the lessons I learned and try to explain this idea  a little more thoroughly:

1. Respect for the local culture – the fact that people from different countries differ from one another in habits, behavior, communication and heritage.  And companies should be careful not to make the assumption that if something works in one market, it will work in another. There is a need to first understand the culture, then tweak and customize the products and services to the local culture. However, this is true to any other “western” country. IKEA had to change its offerings when it came to the states. Starbucks failed when it came to Israel. No one would try to sell exactly the same thing in France and in Germany. Lesson: When you go into a new market, start by re-examining all your assumptions about customers. It is true in Asia as it is in any other place. Not doing it is just bad business.

2. Local differences – a theme the came up again and again in the trip is the diversity inside some of the countries. There are many Chinas and Many Indias was the theme. South India is not like North India. Different languages, different foods, different costumes and holidays. And again, the European market is not the same all over Europe.  Products that work in the UK do not necessarily work in Belgium. There are differences in foods and languages even inside some the European countries. The American market is not the same all over the states as some companies realized when tweaking their products to the Hispanic market in California and the Cuban market in Miami. Things that work in New-York will not necessarily work in Lo-s-Angles. Looking at countries as one segment or market is just not smart business. Lesson: Beware of the fallacy of the average (in the wider sense of the term – and see an interesting perspective of this here).

3. Time, Time, Time – people expect immediate successes. In real life going into a new market, starting a new business and overcoming cultural barriers take time. You wont succeed over night in the west. You will not succeed overnight in the east. Don’t let anybody else tell you otherwise. Lesson: Size of market does not guarantee immediate success no matter where you do business. Patience and perseverance are the keys to success (and see point number two again to understand why the size of the market is in some ways, a myth).

4. People are people – as this blog concentrates on managing people I tried to understand all through the trip if the difference in the culture has an impact on the principles of people management. Does people motivations for work differ? Does the role of a manager or a leader in these countries differ? My answer is – no, it does not. You will find the same diversity of people in Asia as you will find anywhere in the world and there is a need to understand it and leverage it. True, as a whole, Indians are more entrepreneurial in nature than Chinese and Chinese are more bound by conformity, but this is only as a whole. In the individual level, which is the most important level for the manager, people still vary. In this sense, sensitivity to communication methods is vital and understanding the preferences of each individual becomes even more important. Lesson: Managers face the same challenges everywhere, even though the tactical problems might appear to be different.

Countries and people are different. However, they are different in the same way everywhere. Smart business uses good processes and ignores assumptions and attempts to copy models from one market to another. This is true everywhere in the world.

Elad

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Connections, piracy, change and business models

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It is funny how sometimes ideas comes from different directions and connect in ways you could not have guessed they will before.

A few months ago I went to have dinner with two colleagues of mine from my AGSM MBA class. We had a wonderful dinner and an even better intellectual discussion. I don’t really remember how we got to the subject but I mentioned Larry Lessig’s talk on TED about User Generated Content (how the law is choking creativity) where he claims that our society is turning kids into criminal by illegalizing activities that are natural to them.

A few days ago I gave a session to a number of people from our Public Speaking & Debating Club about modern techniques in presentation delivery. One of the examples I used to illustrate my point and stimulate the discussion was the same lecture by Lessig from TED which brought the ideas back to my mind.

This morning, as I was going over my Google Reader reading list, I came by Seth Godin’s post titled: “Teaching the market a lesson“. Here is a small sample:

Some book publishers don’t like the Kindle. Either they’re afraid of it or they’ve crunched the numbers and they don’t like what they see. (Some days, 95% of the top selling Kindle titles are free… demonstrating that digital goods with zero marginal cost and plentiful substitutes tend to move to zero in price).

Worried about the medium, they hold back, delay or even refuse to support it.

A few minutes after that, I got an e-mail from my dear friends Ajaya, one of my colleagues from the dinner a few months ago. This is what he wrote in the e-mail:

Remember talking about illegal downloads and what the fact that almost all kids break the law means to society. Finally, it seems the music industry is figuring it out.

And the email had a link to an article from The Economist titled: “How to sink pirates“. The article describes how the music industry is finally starting to relinquish its fight against piracy, starting to use a model of streaming music, gaining money from advertisements. And it ends with this conclusion:

All of this offers a lesson for other types of media, such as films and video games. Piracy thrives because it satisfies an unmet demand. The best way to discourage it is to offer a diverse range of attractive, legal alternatives. The music industry has taken a decade to work this out, but it has now done so. Other industries should benefit from its experience—and follow its example.

Suddenly, it dawned on me. The points just seemed to connect. These lessons keep repeating themselves:

  1. The world is changing. You can jump on the boat. But you cannot stop it. The past will always try to stop the future. Be it the music industry, the book publishing industry or shop owners in 19th century France. They will fail. The answer to change is change and not more of the same.
  2. Peter Drucker wrote that you can never know how a product that was created in one field could be used in another field. Products and technologies will continue to move across industries destroying business models. The answer will not be found in barricading industries and business models, but in inventing new business models.
  3. “Free” is changing the world in more ways than we can imagine.
  4. Law, legal proceedings and fear can only take you so far. Options, Transparency and self fulfillment will win eventually. It might take time, but it will happen.

You think that the smart people running some of these industries would have learned these lessons by now.

Elad

Obliquity and management

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As part of a “Business Ethics” course I am taking at my AGSM MBA I came across this fascinating article by John Kay titled:  “The role of business in society”. It deals with the long lasting debate surrounding the role of business – to make profits or to be a good corporate citizen. It is an interesting look at the debate and I think it makes some valid points, even though I think in its essence it does not contribute something very new to the discussion. However, one concept in the article made me reach a revelation, the principle of obliquity:

I call this paradox the principle of obliquity. It says that some objectives are best pursued indirectly… We are all familiar with one application of the principle of obliquity. While Americans, characteristically, talk of the pursuit of happiness, happiness is rarely best achieved when it is pursued. Research in social psychology confirms our intuition and experience. Happy people are not, in the main, those who selfishly promote their own interests: in fact happy people are most often characterized by a kind of uncalculating and outgoing generosity

In a later article, titled: “The oblique approach”, Kay writes the following things:

With maturity – personal or corporate – comes the principle of obliquity. Goals are often best achieved indirectly. Many people have noted the paradox that the most profitable companies are not necessarily the most profit oriented

It is so inspiring to read something that actually makes you feel: “wow”. And that is the way I felt when I was reading about this concept. So many times during my life I was told that the first thing we should do is concentrate on the goals and try to align ourselves with them. Why, I taught it myself a number of times. And it is true. And useful. And effective.

But not always. Because sometimes the best way to reach a goal is to reach it indirectly. We all know that sometime we are so obsessed with something that we hurt our chances of actually gaining it. When we let go, it somehow comes naturally. And I know it sounds very Hollywood-Movie like. But it actually happens.  

Think about it. When do you learn the most? When you are sitting in class actually trying to learn or when you are doing something and the learning comes as a side effect? Most people say that the most they learned it from the indirect learning – from other people, from doing, from watching – and not in formal courses. Or from failing. Could you imagine that? Those of us who learned how to drive know that the best teacher of driving is the road. Once you start driving, it actually teaches you about how to drive.

And this concept is so true in so many business settings. And it explains why many of the conventional wisdoms are just wrong! Would the manager help his flowers more by solving their problems or by letting them reach the answers by themselves? If you want to improve the performance of your team do you focus your managerial attention on your strongest people or on your weakest people? The answer to both of these questions is the indirect answer. Don’t give answers and the strongest people. or just think about Judo Strategy, and its claim that sometimes we don’t need to attack by pushing, but by pulling. Or by substituting effort for ability.

I am not saying that the answer to each and every problem is the indirect approach. But when we realize that the direct approach is not working, why not try to attack the challenges we face indirectly. It could be a powerful tool. After all, as Abraham Maslow said: “When your only tool is a hammer every problem looks like a nail“.

Elad

Re-thinking tradeoffs

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Photo by roland

During the last few weeks, as part of our AGSM MBA integrative experience, we participated in a simulation with a software called Markstrat. The simulation allowed us to run companies in teams as part of a competitive environment, making decisions about operations, marketing, strategy and more. In the end of the two weeks experience we each had to write a short essay about what we learned from the experience. Here is a short part of what I handed in:

As future managers we should be aware of that and think carefully about the implications each decision has on our cognitive resources. Attention and time are the scarcest resources a manager can allocate, even more than money. Thus, they should be considered in a decision like any other scarce resource.

This relates to an idea I have been writing and thinking about a lot lately. Tradeoffs. I think as human beings we have the immediate tendency to want everything. To try and be everything. To try and be the best at everything. Maybe instead we should focus our attention on being the best at something. Just one thing that will make us stand out. Not because being good at everything is bad. It is because it is so hard to achieve all at once. Because success is so many times the result of tradeoffs. Of actively deciding not to be good at something, because we put all our resources on something else.

Maybe, in our multi-tasking world, we need to re-learn what our forefathers, the hunters, knew how to do so good – focus on one thing. Become your prey. Follow it enough and you will understand it, start to think like it and finally hunt it.

I was reminded of this concept yesterday while I was reading Seth Godin’s post: “Spare no expense!“. Godin, makes the same point about tradeoffs in a different setting. The resources companies put into making one customer happy. A short excerpt:

The reason we get trapped by (c) is that, “I’m doing the best I can” is always much easier than, “we need to be disciplined and help more people, even if that means that some special cases will fall through the cracks. The internet makes this even more difficult because people who fall through the cracks are able to amplify their complaints ever louder.

The way around it, I think, is to set expectations early and often. If you’re going to give me your phone number, you better answer it. If you’re going to offer a warranty, you better honor it. If you position yourself as a company with real people eager to make every single person happy–you better deliver.

No matter what, you should decide. In advance. How much do you want to spend on ad hoc emergencies, how much do you want to reserve on design and helping the masses improve their experience?

The hard part is making the decision and sticking to it. We see many companies saying things like – “we put our people first” – but when it comes to making the actual choice, the actual tradeoffs, they don’t. It is not only about not fulfilling your promises; it is about not making the right tradeoffs even though you decided to make them.

So, what are your actively chosen tradeoffs? And what do you to keep them?

Elad

Getting down from the ladder

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Our integrative experience in the AGSM MBA this week included a big chapter on adaptive leadership. One of the concepts that were mentioned time and time again was that of rank. How we perceive our and other people’s rank and what effect it has on our assumptions and behaviours.

One sentence that one of our facilitators mentioned (he actually quoted someone else, whose name I don’t remember) struck me as especially interesting. He was talking about rank in organizations and about people “going up the ladder”, being promoted. Then he said:

“When we go up the ladder, we look down and see a lot of shiny happy faces. When they look up, they see…”

Well, he did not finish, so I don’t feel I need to. But that reminded me of the “Toxic Tandem“. People in positions of power tend to be oblivious to the needs and actions of the people who have less power than them. Or in other words, as we described it in class: “managers are usually blind to their rank”. As a manager, it is easy to forget that you are up there on the ladder. That means that the focus of all eyes is on you. And it also means that you are in a different position than everybody else is. Which means it is harder for you to understand them.

Too many managers get to a management position and continue to do what they always did. Their work. Which is good, but not great. The problem is that now their work is being a manager. And that is a totally different job. A job you cannot do without leaving your desk. With out being active about it. without a little, MBWA.

So, the fact that you went up the ladder does not mean you have to stay there all the time. From time to time, you can climb down from the ladder and let the people see your happy shiny face, instead of your…

Elad

Silence, “I don’t know” and problems & solutions

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Photo by said&done

This week we had workshop on Adaptive Leadership as part of our integrative experience in the AGSM MBA. Part of the workshop entailed peer consultation regarding dilemmas the students are facing. We formed groups of five people and in the group we had a very specific process that we had to follow:

First, the person presenting the dilemma had five minutes to present without anybody interfering. Second, the group had ten minutes to ask open-ended questions. Third, for 15 minutes, the group had to discuss the problem. At this point, two rules were put in place. The first is that the presenter should be absolutely silent. The second is that the discussion of the dilemma should not be about solutions, but only an attempt to understand the situation and what is the dilemma made of. The forth stage was a ten minute discussion regarding possible courses of action. Finally, the presenter had five minutes to recap what he found useful.

As someone who likes to focus on the process and its importance, this exercise defiantly appealed to me. I think some bigger insights can be gained from it:

The importance of silence – I think that this is a great reminder to the importance of silence. When you sit silently while other are discussing you become attuned and aware of other things that you usually miss. Your mind is focused on listening and not on the next sentence you will try to push into the discussion. Silence and listening are important tools for communication that are usually underused. I just finished reading the book: “The McKinsey Mind” where one of the tips the writers prescribe is: “we have one mouth and two ears”. This is especially important in feedback sessions and in today’s managerial setting where the manager usually is not the content expert. Listen as twice as much as you talk. This relates to a concept I really believe in: “MBWA – management by walking around”. Go around the office, firm, plant, company. Be silent and listen. What do people say? What do they do? What do the customers say? I grantee, you will learn plenty.

Don’t accept “I don’t know” as an answer – in the same book the authors talked about not accepting “I don’t know” as an answer. They claim that if you go and interview somebody, let’s say, about the causes of a certain problem, many times he will answer: “I don’t know”. But people do know. Maybe they don’t have the entire answer, but they always have opinions, knowledge and theories. And these sometimes prove more valuable than they think. I believe that the silence is important here is as well. Try this next time you interview someone or give feedback to someone. Ask a question. Listen to the answer. Then wait. Don’t go to the next question. In high percentage of the cases, that person will, after a short uncomfortable silence, continue talking. People don’t like being silent. You would be surprised how much they will tell you just to avoid being silent.

Problems and solutions – people in the business world tend to be practical. They want to see and reach the bottom line. They ask: “So what?” all the time. But in our race to be active and create an impact we sometime bark up the wrong tree. We miss focusing on the real problem and create solutions which don’t really solve the problem. We keep trying to deal with fires and don’t ask ourselves how they were caused and why. I mentioned here in this blog that I believe we should be more focused on preventing problems then on solving them. Understanding the real problems is an important part of that. In order to do that, it could be beneficial to limit the discussion to the problem without talking about solutions. It allows us to talk about concepts. To take the balcony view. To think about the underlining rationale. Then, the discussion of the solutions will be much more effective.

Elad

Resisting the temptation to give answers

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There are lessons you learn and that you need to be constantly reminded of. A few months ago, I wrote this:

The conventional wisdom that a manager needs to say to its employees how to do their work is already intertwined into people’s expectations. Just the same way people think that there is one best way to write a speech, give a presentation, use notes or get the audience attention, while there isn’t, people expect their manager to tell them how to do their work.

Today, in class, as a part of a workshop dealing with adaptive leadership, we read an article by Ronald A. Heifetz and Donald L. Laurie, which had this sentence in it:

We all – superiors and subordinates alike – have to change our expectations for dispensing and receiving definitive answers.

As someone who used to spend a lot of time teaching, I know how big the temptation is. Someone asks a question. You know the answer. Actually, you know three times what is needed to give the answer. And you are tempted to immediately give that answer. The problem is, if you want a good process of teaching, you should (in many cases) divert the question back to asker or to the entire class and create a process of self learning.

Management (or as many people call it, leadership, but I won’t go there in this post) is exactly the same. Your employee comes to you with a problem. He expects you to solve it for him, to tell him what to do. That is the conventional wisdom. But, that is exactly what you should not do in most cases. The famous creed: “don’t give a hungry man a fish, teach him how to fish” is on the spot but not implemented enough. We need to resist the temptation and try to give solution or  answers and move to letting people find their own ways. So they will be able to do the job when you are not there. Tell them what the desired outcome is and let them find the solution. Give them the support and help, but not the solution. Resist the temptation.

So, are you able to resist the temptation?

Elad